Exam 12: A Firms Sources of Financing

Match the term with its definition. -Obtaining cash from a lender who, for a fee, advances the amount of the borrower's cost of goods sold for a specific customer order

Granville owns a construction company and would like to purchase a mobile construction office. The bank would likely offer him a _____ mortgage.

Match the definition with its term. -Individuals who form limited partnerships for the purpose of raising venture capital from large institutional investors

Match the term with its definition. -The issuance of stock to be traded in public financial markets

Generally, as long as a firm's return on assets is greater than the cost of debt, the owners' return on equity investment will decrease as the firm uses more debt.

Family and friends provide almost _____ percent of startup capital beyond the entrepreneur's personal savings

Chuck, Marie, and Tommy are a group of friends who have formed a limited partnership to raise capital for an investment in 20 franchises of Rigby's, a new sports bar concept. Tommy will be the general partner; Chuck and Marie will be limited partners. These three are

Goodwill is considered an intangible asset and is highly valued when securing a loan.

If he holds true to the average, before becoming president, Donald Trump likely invested approximately _____ of his investment in later-stage businesses.

Connie owns a small but growing company that produces gorilla glass for smartphones. One possible source of funding might be

Which of the following types of crowdfunding is subject to securities laws?

Business loans are the primary source of financing for startups.

Gina owns a clothing resale store in a low-income neighborhood. Since opening, the store has hired five employees and is making a small profit. The store is the only business in her area and often sponsors fundraisers at the location. Because the store is in need of expansion capital, what type of funding should Gina seek and why?

Novelty Shirts is a manufacturing company that needs to expand its production facilities. Which of the following SBA programs would be best to acquire real estate valued at $150,000?

Fans set up a crowdfunding account to produce new, not-for-profit episodes of Star Trek based on the original series. This type of crowdfunding uses the _____ approach.

The type of financing Evangeline received from a business angel is known as

Guaranty loans are

Match the term with its definition. -The sale of a firm's capital stock to select individuals

Floyd's income statement for the current year showed operating profits of $45,000, and his balance sheet showed total assets of $300,000. His return on assets is _____ percent.

Three basic characteristics determine how a firm is financed: the firm's economic potential, the size of the company, and the nature of its assets.